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Raw sugar steadies near six-week high

Raw sugar on ICE steadied near a six-week high on Monday, underpinned by downward revisions to forecasts for output and for wetter weather in Brazil, while a stronger dollar pushed coffee and New York cocoa lower.

“In centre-south Brazil, steady rain is forecast every day for the coming 10 days,” Marex Spectron said in a weekly report.

“As the new harvest gets going (from the end of this month), rains will impede the harvest and tend to cause mills to favour ethanol rather than sugar production.”

The market also focused on the early closure of mills in India, due to a lack of cane.

Consultancy Agrilion said analyst Green Pool had cut its output forecasts for China and north Brazil still further although both campaigns were well advanced.

Speculators increased their bullish stance in ICE raw sugar contracts in the week ended March 1 for the first time in six weeks, and increased their bearish cotton positions to the biggest since late 2006, government data showed.

May raw sugar was up 0.03 cent, or 0.2 percent, at 14.86 cents per lb at 1213 GMT, having climbed on Friday to the highest since Jan. 19 at 14.93 cents.

“In the near term, it seems we will be testing the resistance levels again. We are all seemingly waiting patiently for a test of 15 cents,” Sucden Financial Sugar’s co-head of softs Tom Kujawa said.

May white sugar was up $1.60, or 0.4 percent, at $425.40 per tonne.

ICE arabica coffee futures eased in light technically-driven dealings, pressured by the firmer dollar.

May arabica coffee was down 2.15 cents, or 1.8 percent, at $1.1890 per lb, with dealers focused on the development of the arabica crop in top grower Brazil before the harvest due to start around May.

May robusta coffee was down $5, or 0.4 percent, at $1,388 per tonne.

London cocoa futures edged lower, still trading near a two-month high as traders kept careful watch on the prospect of lower mid-crops in West Africa.

May New York cocoa was down $4, or 0.1 percent, at $3,004 per tonne, having risen on Friday to $3,018, the highest since Jan. 8.

May London cocoa was up 6 pounds, or 0.3 percent, at 2,217 pounds a tonne.

(Reuters)

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